Pakistan Economy - News & Updates - Archive

[Owais]

Pak-US council discusses bilateral investment treaty


ISLAMABAD (October 04 2006): The Pak-US Council under the Trade and Investment Framework Agreement (TIFA) started its second meeting at the commerce ministry here on Tuesday to broaden and strengthen bilateral trade and economic relations.

Commerce secretary Syed Asif Shah headed the delegation from Pakistan. Representatives from foreign affairs, industries and law ministries, economic affairs division also participated in the discussions.

Official sources told Business Recorder the meeting discussed bilateral investment treaty, intellectual property rights, protection of pharmaceutical patents and reconstruction opportunity zones (ROZs). They said the US delegation was given an update on institutional development and legislative process to accommodate US demands for protection of US business interests before finalisation of TIFA.

They said the meeting, being held as a follow-up of President General Musharraf's visit to the United States, was significant due to its potential for strengthening of bilateral relations with particular reference to trade and investment.

Commerce secretary Asif Shah and US trade representative Hatwick will brief newsmen about the outcome of the second meeting on Wednesday at the commerce ministry.

It may be recalled the Trade and Investment Framework Agreement (TIFA) was signed on June 25 in Washington DC by the then finance minister, Shaukat Aziz, and USTR Bob Zoellock. Article 2 of the TIFA provides for setting up of Pak-US Council on trade and investment.

The first meeting of TIFA council was held in April 2004 in the USA, which discussed issues pertaining to bilateral investment treaty, intellectual property rights and trade, etc.

 

[Owais]

SBP to introduce 100, 500 currency notes


ISLAMABAD (updated on: October 04, 2006, 17:43 PST): The State Bank of Pakistan (SBP) will introduce new currency notes in the denominations of 100 and 500 in the forthcoming month.

Talking to private TV channel, States Bank's spokesman Waseem-ud-Din said that the central bank, in accordance with the government's decision is introducing new currency notes in place of all old notes.

The bank's spokesman said that both old and new currency notes of 100 and 500 would remain valid simultaneously.

The target of introduction of new currency notes in place of old ones would be achieved during the current year, Waseem-ud-Din said.

 

[Owais]

'Noor Group refinery to be a milestone in ties with Kuwait'

ISLAMABAD (October 04 2006): A 3-member delegation from Kuwaiti Noor Financial Investment Company headed by Deputy Chairman Nasser Al Marri called on Minister for Petroleum and Natural Resources, Amanullah Khan Jadoon here on Tuesday and discussed matters pertaining to the proposed refinery being set up by the company at Port Qasim with an investment of US $1.5 billion.

The minister welcomed the Kuwaiti Noor Financial Group's investment for setting up the refinery at Port Qasim and said it would be a milestone in Pakistan-Kuwait brotherly relations.

He said the government has deregulated the petroleum sector and was providing an attractive package incentives to the prospective investors in an investor-friendly climate.

He said there existed a lot of potential for the investors in oil and gas activities and privatisation process of state owned units. He invited the Kuwaiti company to participate in the oil and gas activities for the mutual advantage.

The minister said the government would facilitate the Kuwaiti company for the setting up oil refinery and assured them his full co-operation in this regard.

Deputy Chairman Kuwait Noor company briefed the minister about the world-wide activities of the group and appreciated the growth of oil and gas industry in Pakistan in last few years.

He said that Noor company would also take part in the oil and gas units privatisation activities for the mutual advantage.

 

[Owais]

German traders keen to set up equipment manufacturing plants for alternate energy


KARACHI (October 04 2006): The German businessmen have expressed their willingness in setting up the plants for manufacturing equipment required for generating alternate/renewable energy, as Pakistan is far behind in this sector. One unit manufacturing wind generator would cost around four million dollars and three or four units are expected to be setup soon.

The concerned issues were discussed in detail, at a conference recently organised jointly by Alternate Energy Development Board, German Consulate and Pak-German Business Council.

SS Haider, an alternate energy expert told Business Recorder that the German businessmen were very keen to make investments in this sector, particularly in establishing the plants manufacturing equipment required for generating energy.

He said that European businessmen encouraged with the policies of the present government had realised the profitable opportunities existing in Pakistan.

European countries have set the targets to reduce their dependence from the conventional energy resources. The European companies involved in the manufacturing of alternate energy generating systems, like wind generators and solar cells etc, are awfully busy in meeting their own requirements and have no capacity to export the equipment. Alternate energy analysts said that Pakistan was an ideal place for investment and setting up manufacturing units, as the labour is quite cheap and available in abundance, with tropical weather and favourable government policies adding that the foreigners could also export their products from Pakistan. It is matter of great concern that the country has not been able to prepare wind generators, while the prices of 50MW wind generator has reached to $3.5 million from $2.2 million in the past three years.

"We are begging for wind generators from the Europeans for the last over three years, but they are busy in meeting their own requirements and have no time to pay heed to our cries. There has been a difference of at least one million dollars in the price of 50MW wind generator and they are still not providing us with the product," said an analyst. He further added, "we must manufacture it in home, if want to meet our energy requirements. There are some low capacity generators and we may also copy and modify it as there is nothing wrong in it," he observed.

Top management representatives of Cosmos Group, Suntechnics and Hawi Energietechnik Germany attended the conference, which was also attended by the members of Pak-German Business Council. Local businessmen offered all their co-operation to the foreigners in this regard. Another expert in the field of alternate and renewable energy talking about the above mentioned conference said that it was a matter of great concern that when the Germans asked for the feasibility report regarding the solar energy plans and solar cells, there was nothing to be presented. Experts and analysts are of the opinion that Pakistan was way behind in the alternate energy sector and added that consistent attention should be given to the area.

They also criticised the role of Pakistan Silicon Institute, Islamabad, which has failed to play its role.

 

[Owais]

ABN Amro eyes stake in Prime Bank


KARACHI (October 05 2006): Dutch bank ABN Amro is eyeing a stake in Prime Bank, and plans to start a due diligence review of the mid-sized Pakistani lender soon, sources familiar with the development said on Wednesday. "ABN Amro has been granted permission by the state bank to conduct the due diligence of Prime Bank," said a banking source, who declined to be identified.

He, and other sources, however, did not say how much time the process will take. Senior ABN Amro and Prime Bank officials were unavailable for comment. Prime Bank has a network of 63 branches across country, and its deposits amounted to around 40 billion rupees ($660.5 million) as of June 30.

Prime Bank shares closed 5 percent up on Wednesday, at 55.65 rupees, in a broader market, which was up 1.43 percent. It has a stock market value of about $250 million, according to Reuters data. Dealers said Prime Bank's sharp rise was due to speculation over ABN Amro's interest.

ABN Amro is one of several foreign banks eyeing possibilities in Pakistan. Britain's Barclays Plc, Singapore's Temasek Holdings, and HSBC are among those exploring possibilities, according to bankers. Analysts say foreign banks have been attracted to Pakistan's financial sector by reforms that have laid the platform for rapid growth and rising incomes.

Major banking reforms pushed through by Prime Minister Shaukat Aziz, the finance minister President Pervez Musharraf poached from Citibank and then promoted to premier, have helped the economy's rehabilitation. Banks' profits grew 87 percent in 2005 and are expected to grow at around 44 percent this year, according to analysts.

They say that over the next few years, the banking sector will likely see more consolidation because of higher capital adequacy ratios and new regulations under Basel II. Driven by high profits, banking sector stocks have gained 44 percent so far this year, analysts said, outperforming a near-11 percent rise on the broader stock index

Bankers say that after the sale of Union Bank, PICIC Commercial Bank, Soneri Bank and Prime Bank are the next likely targets for foreign buyers. However, they say that potential buyers will try to pay less for these banks, compared with the price that Union was able to attract. Standard Chartered paid over 17 times Union Bank's 2005 earnings and 5.6 times its net asset value as of the end of March.

 

[Neo]

80pc quake reconstruction by 2009: Musharraf

ISLAMABAD, October 05, 2006: President Pervez Musharraf on Thursday said 80 per cent of reconstruction work in quake-ravaged areas would be completed by 2009 but urged donors to help meet shortfall of 800 million dollars for building houses and facilities in excess of earlier estimates.

Speaking at the first ERRA Annual Review Conference, he reaffirmed resolve of the government to convert the challenge posed by October 8 earthquake into an opportunity for raising living standard of people.

"We can not bring 73,000 people who died but I assure the survivors to give them better life, better living standard and facilities," he promised.

President Musharraf said he had set 2009 as target for the Earthquake Reconstruction and Rehabilitation Authority (ERRA) to complete 80 per cent of reconstruction work in quake-hit areas of AJK and NWFP by 2009.

But the construction of houses would be completed by December, 2008 as, the president said, it was the main issue for the sustenance of people in the areas devastated by 7.6 magnitude earthquake last year.

However, as against an earlier estimate of 400,000 houses, the government would now have to build 600,000 houses to accommodate some 3.5 million displaced persons.

As a result, the president said, the cost of 3.6 billion dollars calculated earlier for the reconstruction phase has now increased to 4.4 billion dollars, creating a shortfall of 800 million dollars.

The president urged the people and the international community to help meet the challenge of building additional houses and other facilities in excess of earlier estimates.

The amount would be utilised most judiciously to provide comfort to the people affected by the earthquake, he added.

President Musharraf highly praised the efforts of ERRA to meet the challenges and said Pakistan was now being referred to as a text-book model for meeting tragedy of such epic proportion.

He also expressed his gratitude to the international community, the United Nations, innumerable NGOs, the entire Pakistani nation and the country's armed forces for joining hands to give everything to those who lost everything.

These combined efforts, the president said, had proved those wrong who were portraying dooms-day scenario and predicting death of people by famine, harsh winter and epidemics.

He said no one died of hunger, epidemic or lack of facilities and thanked the global community for their invaluable support to transport relief goods from all over the world and deliver it to the people in remotest of areas.

There were also prediction that people would not survive the harsh Himalayan winter, he said but added that no one was frozen to death and again thanked the world community for meeting the requirement of one million tents.

The president asked those predicting dooms-day scenario to see things positively and understand the realities.

In this respect he referred to reports which claimed that some 1.8 million would still be living in tents in the coming winters.

President Musharraf said as a result of the committed efforts, 95 per cent of the affected people now have proper shelter and only five per cent were living in tents.

Referring to reports of corruption, the president said while there may be a few instances at the lower level, full credit goes to the ERRA for disbursing Rs.60 billion among the affected people in a transparent manner.

Recalling the immediate aftermath of the earthquake, the president said helicopters of army, air force and navy along with US Chinooks provided the vital support to rescue thousands of people.

Similarly, he said at the time when the entire communication network had broken down, the army engineers worked day and night to open roads in just two or three days so that relief goods could reach the stranded people.

"The whole efforts were synchronised and well done...we are proud of it," he said and added that without the world support, Pakistan alone could not have handled the disaster.

The president said the joint survey carried out by the World Bank, the Asian Development Bank and the government agencies estimated 5.2 billion dollars on relief and reconstruction efforts.

He was full of praise for the international community which attended the donors' conference in Islamabad last year and pledged 6.5 billion dollars.

President Musharraf also expressed gratitude to the people and expatriates Pakistani for contributing Rs.12 billion in the president Relief Fund.

However, the president said the test was not yet over as after the relief and rescue phase, the efforts now have entered the challenging task of reconstruction and rehabilitation.

The president said the review conference was held to show to the donors the achievements and the work on ground.

He held a firm assurance to the donors that their assistance had not gone and would not go waste and would be utilised for the genuinely affected people hit by the quake.

He said that 95 per cent people were provided proper shelter, offices and departments were functioning and economic activities going on in markets and bazaars.

The devastated Balakot district was being relocated while Muzaffarabad, Bagh and Rawalakot would be developed through proper town planning to have better facilities than they had earlier.

People were constructing houses, the president said and added that they would get the last tranche only when they followed the earth-quake resistance design provided by the government.

About the educational and health facilities, the president said that the government was following the need-based strategy and said all these facilities would be constructed in a better manner.

President Musharraf underlined the need of raising rescue teams at the national level to meet disasters of such massive magnitude.

He also referred to the creation of National Disaster Management Authority and National Disaster Management Plan in this context.

The president on the occasion said the government was determined to change this challenge into an opportunity and said "we will not fail the nation, we will not fail the people who are affected by the earthquake".

Earlier, after entering the Convention Center Hall, the president went straight to children and women on wheel-chairs, victims of the October 8 earthquake, who had been invited to attend the function.

He inquired after their health and assured that the government would continue to look-after them and provide best of medical facilities.

In his remarks, the Chairman ERRA, Altaf Saleem, presented an overview of the efforts made so far for the rehabilitation of the quake-hit people.

Deputy Chairman ERRA, Lt. General Nadeem presented the Annual Review 2005-06 titled "Rebuild, Revive With Dignity & Hope".

A documentary was shown on reconstruction efforts, followed by launching of Theme Song on earthquake and unveiling of Remembrance Day Stamp by the president.

President Musharraf also inaugurated the Photo Exhibition, featuring efforts related to relief, rescue, reconstruction and rehabilitation efforts.

 

[Neo]

UAE investors eye Pak energy firms

5 October 2006

DUBAI — Leading UAE groups and Middle East investors have shown strong interest in energy sector of Pakistan despite recent rescheduling of privatisation plan, a senior Pakistani official told Khaleej Times yesterday.

"The government is committed to the privatisation plan and it's on track," Dr Salman Shah, Adviser to the Prime Minister on Finance, Revenue, Economic Affairs and Statistics, said here.

In reply to a question about privatisation of Pakistan State Oil (PSO) in which leading UAE groups are participating, he said it would be privatised by the end of this year.

"PSO transaction is at advance stage now and it would be concluded by December," Dr Shah said.
"Its a mega transaction and such deals take time," he said adding that bidders concerned are not worried due to the delay in PSO privatisation.

"Leading investors and investment houses in the UAE have shown interest in Pakistan's economy and they will also participate in the privatisation programme," he said. "Gulf region has shown significant interest in Pakistan's privatisation programme," he observed.

"We have a meeting with leading investment houses and groups in Abu Dhabi and Dubai and response is encouraging," he added.

Dr Shah was in Dubai yesterday in connection with the roadshows for the forthcoming issue of OGDCL after meeting key investors in Kuwait.

The PSO is the largest state-run oil company in the country as well as a listed entity on Pakistani bourses. The Federal Government holds approximately 54 per cent stake in PSO, including both direct holdings of the Federal Government and indirect holdings through GOP owned institutions.
It is the second attempt of the government to sell a majority stake in the company after scrapping a plan to sell the company in 2003 following lack of interest shown by Kuwait Petroleum Corporation, one of the two bidders. The second bidder was Pakistan's Fauji Foundation.

The UAE groups are among strong contenders for PSO and two state run gas companies — SNGPL and SSGC. However, investors from Saudi Arabia are also being considered as serious buyers for Pakistan's largest state-run oil firm and gas entities.

"Al Ghurair Investment and Abu Dhabi Group of UAE are potential bidders for PSO and participated in a pre-bid meeting in March this year," sources in Pakistan's Privatisation Commission said. Consortium of Al Jomeih Group of Saudi Arabia is the third short-listed contender for Pakistan's biggest fuel oil company.

About the UAE groups interested in two gas entities, the official said Warid WLL/Abu Dhabi Group, Dana Gas PJSC/Aljomaih Group and Crescent Petroleum Company International Limited of UAE have shown their interests in Sui Northern Gas Pipeline Company Limited (SNGPL) and Sui Southern Gas Company Limited (SSGC) and submitted SOQ to ensure their participation in privatisation process of both the gas firms.

Moreover, Al Ghurair Investment LLC/Calik Energy A.S and Shell International Gas & Power Limited of UAE are willing to participate in bidding process for only SNGPL and SSGC respectively.

United Bank Limited, one of Pakistan's top three commercial banks and partly owned by Abu Dhabi Group of UAE, is also among the potential bidders for both the state-run gas companies.

Other Middle East investors who submitted SOQ include Noor Financial Investment Company (Kuwait)/ National Industries Group, Global Investment House (Middle East) / KOGAS, Aref Investment Group (Kuwait)/ National Gas (Egypt) and Burhan Oil Services Company (Kuwait).
The Privatisation Commission will not allow one party to acquire both gas companies, however one party may participate in the privatisation process for both to maximise their chances in the bidding process.

Pakistan earned record over $3 billion proceeds from selling stakes in nine state-run companies during the last fiscal year ended on June 30.

"The proceeds will increase after the government sells stakes in key public sector units including PSO, PPL, OGDCL and National Investment Trust Limited during the current fiscal year," sources concluded.

 

[Neo]

GDR listing to enhance Pakistan’s profile

ISLAMABAD, Oct 4: The Pakistani government is considering embarking on Global Depository Receipt (GDR) offers of shares from three banks - Habib Bank, United Bank and National Bank - and a power generation company.

In an interview to UK-based daily Financial Times, Privatisation and Investment Minister Zahid Hamid stated that this to be followed by an international GDR offer of 10-15 per cent shares of the state-owned Oil and Gas Development Company (OGDCL) on the London stock-exchange.

The minister said that this OGDC offer would give us access to international capital markets. “It will not only enhance the country’s profile but also help OGDC’s transformation,” he added.

Mr Zahid further stated that the response from prospective investors during roadshows outside Pakistan had been positive.

OGDC, with a market capitalisation of approximately $10.2bn, announced this week that it had discovered oil and gas reserves in the northwest, which would raise the country’s daily oil production capacity to 69,000 barrels from 65,000 barrels. It has also discovered gas reserves with a capacity of about 12 million cubic feet per day.

The Financial Times observed that the plan highlights Pakistan’s increasing interest in reaching out to international capital markets, almost 12 years after Pakistan Telecom shares were offered globally in this way.

The move follows an economic recovery of more than two years that has encouraged government leaders to give the go-ahead for Pakistan’s return to international capital markets, senior government officials have said.

The government has not revealed the exact value of OGDC shares that would be offered, though officials have said they expect the listing to take place in the next two to three months, the daily reports.

 

[Neo]

Export of non-textile products up by 33pc

ISLAMABAD, Oct 4: The export of non-textile products mainly commodities rose by 33.3 per cent to $1.228 billion during the first two months (July-Aug) of the fiscal year 2006-07 as against $0.921 billion the same months last year.

Official figures compiled by the ministry of commerce showed that the increase in the export proceeds during the months under review was due to a hefty growth of more than 25 per cent in export of primary commodities mostly rice.

Meanwhile, export of Pakistan’s traditional products like engineering goods, sports, carpets, leather, surgical and pharmaceutical products were constantly on decline during the first two months of the current fiscal year.

Analysts attributed the decline in these manufactured products to the ill-advised and improper policies of the government, which were only focused on the promotion of textile products.

They said that the textile tycoons had a say in government policies and they could easily get what they want at the cost of the taxpayers. However, the government remained silent about other sectors, which were near to closing down if no proper steps were taken immediately.

Among the primary commodities, exports of fish and fish products rose by 2.70 per cent, rice by 103.32 per cent, and meat and meat preparations by 9.32 per cent. However, exports of fruits declined by 48.68 per cent, vegetable dipped by 56.04 per cent, tobacco by 73.81 per cent and oil seeds by 10.79 per cent during July-Aug 2006 over last year.

Official figures showed that the export of sport goods (football and gloves) declined by 46.37 per cent; carpets, rugs and mats by 43.42 per cent; and leather goods (garments and gloves) by 40.75 per cent during the months under review over last year.

The exports in these sectors were on decline despite the fact that government exempted them from sales tax and other duties.

 

[Neo]

‘Increase in cotton production’

MULTAN, Oct 4: An increase of 14.46 per cent was registered in the cotton bales which arrived at various ginning factories in Punjab as compared to the corresponding period, last year.

According to the data provided by the Pakistan Cotton Ginners Association, till September 646,643 bales of cotton arrived at the mills of the province as compared to last year’s 564,941.

According to the break down, in Multan 20336 balse arrived for ginning, at Khanewal, 88,982, Lodhran 4,090, Muzaffargarh 22,220, Dera Ghazi Khan 9,145, Rajanpur 9,880, Layya 10,560, Vehari 70,900, Sahiwal 97,342, Pakpattan 43,827, Okara 10,300, Qasur 3,400, Toba Take Singh 34,782, Fasialabad 40,409, Jhang 21,500, Mianwali 1,300, Bhakhar 8,000, Rahim Yar Khan 33,200, Bahawalpur 32,050 and in Bahawalnagar 84,300 bales arrived at the factories.

This year, the total number of cotton bales which arrived at various ginning factories across the country was 1,103,264 while it was 1,273,554 last year.

Results: The Bahauddin Zakariya University announced the result of BSc electrical and civil engineering here on Wednesday.

According to the results, out of 17 candidates of electrical engineering, second term, first annual examination-2005, eight were declared successful, while out of 63 civil engineering, first term, 2006, candidates, 37 passed the first annual examination.

RALLY: The Save Animal Movement, observed animal day and held a rally here.

The movement office-bearers Maqbool Hussain Bhatti (secretary general), Rashid Rehman, Baigam Zuhra Sajjad Naqvi, and others spoke at the rally.

They demanded an end to torture on the animals, besides a separate ministry for their welfare.

 

[Neo]

Thursday, October 05, 2006javascript:; http://www.dailytimes.com.pk/print.asp?page=2006\10\05\story_5-10-2006_pg5_2
Pakistan, US to set up body to promote trade, investment

ISLAMABAD: Pakistan and the United States have agreed to form a Trade Liberalization Study Group to create an environment conducive to the promotion of trade and investment between the two countries.

The US side has, however, ruled out the possibility of a Free Trade Agreement in near future between the two countries. This was announced at the conclusion of the second meeting of the Pak-US Trade and Investment Framework Agreement (TIFA) Council. Assistant United States Trade Representative (AUSTR) Ambassador Douglas Hartwick and Syed Asif Shah, Secretary Commerce Pakistan, at a joint press briefing on Wednesday.

The terms of reference of the study group would be finalized and exchanged between the two countries and the measures that would be recommended by the study group would be implemented by both the countries for promotion of bilateral trade and investment, said Mr Shah.

Ambassador Hartwick said both the countries have discussed the basic details of the Re-construction Opportunity Zones (ROZs) to provide economic and employment opportunities to the less developed areas of Pakistan and Afghanistan to benefit from zero duty concession from the US side. He, however, clarified that the list of the products to qualify for the zero-duty status at the time of import at US ports are yet to be finalized.

He said the ROZs’ package is important for the US as well as for the other two stakeholders. The US will finalize the recommendations in this regard after getting input from Pakistan, Afghanistan and the private sector of both the countries.

For the establishment of ROZs, the US government will require a new law and legal authority.

A law relating to the establishment of ROZs is still to be drafted in the US and this government would try early finalization of this process so that this can be got approved from the competent authority in the United States.

He informed that the government of Pakistan has completed its study on the subject that will be handed over to the United States in the next few weeks. He said the US wants a large list of products for zero-duty status from ROZs so that the areas are able to avail of more benefits from these zones.

He said textile products are a wide term and the US will decode which type of textile products to be included in ROZs’ package. He said the US has not denied inclusion of textile products in the proposed list of items.

On the issue of Bilateral Investment Treaty (BIT), the ambassador said five rounds of negotiations have been held between the two countries and both the countries are near an agreement on the BIT.

He, however, pointed out that investment policy and legal issues require due care in finalization of this process. Both the countries want early finalization of this important agreement.

Replying to a question relating to Pak-US Free Trade Agreement, the ambassador said that “it is possible but when we don’t know.” He, however, said Pakistan is not benefiting properly from the Generalized System of Preferences (GSP) program due to lack of awareness.

Pakistan can benefit more from this GSP program, which provides for duty- free market access to developing trading partners of the US, including Pakistan. He informed that the current tenure of the GSP is ending on December 31, 2006. However, he hinted its extension for another one or two years and said the new GSP will review the status of the beneficiary countries, including Pakistan. However, he ruled out the possibility of Pakistan’s expulsion from this (GSP) program in future. At present Pakistan is getting $100 million duty-free market access under this GSP program, he added.

On the issue of Intellectual Property Rights (IPRs), the ambassador said Pakistan has taken some remarkable steps during the last 18 months due to which Pakistan has been placed among the countries’ list which have shown good improvement in IPRs’ protection and enforcement. He said the US will offer further assistance to Pakistan to build its capacity for enforcement of IPRs. This will enable the country to attract more foreign direct investment and trade opportunities.

Later a joint press statement relating to the US-Pakistan TIFA Council meeting was also issued. According to the joint statement, the United States and Pakistan underscored the importance of the economic relationship and pledged to work to continue to expand bilateral trade and investment opportunities.

On IPRs, the US delegation praised Pakistan’s progress in strengthening its intellectual property regime. The delegations identified areas for continued cooperation to strengthen protection. The United States noted the need for further progress on issues, such as data protection and patents. Ambassador Hartwick announced new US assistance for capacity building for Pakistani ministry of health and Intellectual Property Office (IPO) officials.

The two delegations reviewed preparations for the establishment of Reconstruction Opportunity Zones (ROZs) to spur development of economically-disadvantaged areas in the border regions of Pakistan and Afghanistan. The ROZ initiative will require new US legislation. The ROZ concept was announced by President Bush during his visit to Pakistan in March 2006.

The two sides explored new ways to expand trade, including greater use of the US GSP program, diversification of trade, textiles and agriculture.

Ambassador Hartwick praised Pakistan for its commitment to expanding economic opportunities through economic reforms, reducing tariffs and pursuing open investment policies. A Pakistan-US joint study group on trade liberalization was also formed, to explore ways and means to enhance the bilateral economic relations between the two countries.

Ambassador Hartwick also held consultations with representatives of private business in Peshawar, Islamabad and Karachi during his visit.

The next TIFA meeting is scheduled for 2007 in Washington.

 

[Neo]

Thursday, October 05, 2006javascript:; http://www.dailytimes.com.pk/print.asp?page=2006\10\05\story_5-10-2006_pg5_7
80,000 tonnes of mangoes exported

KARACHI: The country exported 80,000 tonnes of mangoes during this season by meeting the target, however it fell short of export figures of last year when around 100,000 tonnes of mangoes was exported in the last season.

The country’s mango export figures were all-time high during the last season because of good crop, however during this season, unsuitable weather conditions dampened the prospects of good crop, which resulted in low production and export target, officials in Pakistan Horticulture Development & Export Board (PHDEB) said.

Pakistan had a good fruit production and export season last year when good mango production was followed by bumper kinnow crop and its record export. Like low mango production and export, officials predict that kinnow production and its export would also not be high as was recorded in the last season.

Officials said that most of exportable mangoes went into the traditional markets of Middle East and Europe, which consumed 37239 tons and 13650 tonnes respectively while rest found its way into other markets with new Iranian market imported 1350 tonnes of mangoes. They, however expect that prospects for future export of mangoes would be bright as new Iranian and Chinese markets would be exporting more mangoes from Pakistan, whose potential is yet to exploited.

Presently mangoes are exported to United Arab Emirates (UAE), Saudi Arabia, Oman, UK and Kuwait while the other potential markets, being targeted include China, Iran, South Africa, Australia, Russia, Central Asian States and East Europe.

As Pakistan has signed protocols with China and Iran, it carries bright prospects because these countries are located in the neighbourhood, making it easy for the Pakistani fruit to capture these markets because of cheap and easy transportation. Mango production was anticipated at around 1.6 million tonnes, but the bad weather conditions caused 20 to 25 per cent shortfall in production by bringing it down to 1.3 million tonnes during this season.

 

[Neo]

Pakistan surpasses US in cotton consumption

KARACHI: Pakistan has become the third largest country in cotton mill consumption during the current fiscal, overtaking the United States as it stands among three countries which are estimated to consume 65 per cent of the total commodity’s consumption the world over.

A recent report issued by the International Cotton Advisory Committee (ICAC) suggests Pakistan’s textile industry follows China and India in cotton mill consumption and the trend is likely to continue for the next few years.

“China (mainland), India and Pakistan combined may consume 16.6 million tonnes of cotton in 2006-07, or 65 per cent of projected world consumption, up from 50 per cent in 2000-01,” said the ICAC estimates received here by the federal ministries of agriculture, industries and the newly-formed textile.

“Cotton consumption in the rest of the world is projected to remain stable at nine million tonnes.”

Similarly, it said, cotton consumption in the United States was on the decline on higher production cost and increased influence of imported textile products, which convinced the local manufacturers to shift their production units to Asian countries.

The cotton use by the mills in the country has been on the rise for the last more than two years on what the industrialists say is a massive balancing, modernisation and replacement (BMR) programme and expansion plan undertaken by the textile industry. The industry is believed to have invested $4 billion to $5 billion since 2000 in the BMR.

The ICAC, which represents 42 governments of cotton producing and consuming countries, said the global textile industry is expected to continue to increase raw material consumption on higher production demand but not at the required pace.

“World cotton consumption is expected to continue to increase in 2006-07, but at a slower rate than in the last two seasons, to 25.6 million tonnes,” said the international body.

It said the textile industry mainly in Asia could face a shortage of raw material due to lower-than-expected production of cotton than demand.

Analysts see the ICAC prediction in line with the expectations but see tough time ahead for the local industry due on lower cotton production and higher production cost.

“There is no doubt that the textile industry has registered growth during the last few years but at the same time it faces serious challenges,” said Faisal Shaji, head of research at Capital One Equities.

“Prices of raw material, particularly the cotton, are not likely to come down from the current level but even feared to go further up, which would ultimately increase the production cost.”

He said the higher cost could prevent the local industry to design aggressive production plans for the current financial year. The overall situation could also hit the production and export of the textile products, he added.

“In the current scenario gross margins of the textile mills are likely to go down during this fiscal on increased production cost and higher interest rate,” said Shaji.

Textile shares more than 60 per cent of exports from the country every financial year. However, for a year it faces a downward trend in its overall share. The latest figures compiled by the Federal Bureau of Statistics earnings from textile products dropped by 7.10 per cent during July-August to $1.625 billion compared to the corresponding period last year.

A recent United Nations Development Programme (UNDP) report revealed that Pakistan is selling its textile products to the European Union countries and the US at the cheapest rate in South Asia.

 

[Neo]

Foreign portfolio investment reaches $107.8m

LAHORE: Portfolio investment in stock exchange and securities through Special Convertible Rupee Accounts (SCRA) has increased to $107.893 million, which is highest so far in the current fiscal.

According to latest data released by State Bank of Pakistan, SCRA saw $17.13 million inflow on October 02, 2006 against outflow of $6.40 million. The net inflow registered on October 2 was $10.72 million. Resultantly, cumulative net inflow via SCRA has been jumped to $107.89 million in the current fiscal. Just two days back, the SCR account had a quantum jump to $97.2 million.

The major contributors have been from UK with investment totalling $7.60 million while USA bagged second position as far as portfolio investment is concerned with inflow of $4.86 million.

Investors from Singapore invested $4.66 million on October 2, securing third position.

Cumulative investment from UK has been to the tune of $71.15 million in current financial year while Singapore secured second position with $48.74 million.

The major chunk of overall portfolio investment has been in the banking sector.

On outflow side, cumulative portfolio investment of Switzerland stands at $20.04 million in the current financial year followed by Hong Kong with $3.68 million.

Unlike previous trend, foreign investment in stock exchanges of the country is once again consolidating, especially for last one month.

Earlier, since March this year a sharp decline has been witnessed. July was the worst when investment declined sharply from $49 million (last year same month) to $29 million this fiscal.

Unlike past year, when US and UK shared the major chunk in pie, this time Singapore has brought major investment and presently enjoys second position as far as cumulative net flow during the fiscal.

 

[Neo]

Chinese company may not resume coal-fired power project in Thar

KARACHI (October 06 2006): A Chinese state-run company, Shenhua Group Corporation may not resume its 600MW coal-fired power project in Thar till the electricity tariff issue with the Pakistani government is not resolved.

Sources in the Sindh Coal Authority (SCA) told Business Recorder on Thursday that in order to meet power shortage in the country the provincial government had once again established contacts with the Chinese group through the SCA but it (Shenhua group) was still avoiding to restart their work in the Thar desert.

"There is slim chance that the Chinese group may response because new offer does not contain any negotiation on power tariff," the sources said. The Shenhua group had intended to initiate work on 600MW coal-fired power project at an estimated cost of $500 million in Thar but Wapda's reluctance to offer fair tariff put the plans of the group on hold.

Wapda had offered 5.7 cents power per unit but the group had stand that since the Wapda was paying eight to 13 cents per unit to gas-based, diesel-based and fuel oil-based IPPs, the authority should increase the tariff for the electricity produced by the coal-fired power plants.

The sources said that the government intended to invite the group to re-initiate the project because the Chinese company had completed much of its work and was in better position to start electricity generation work on earliest.

The government in the year 2002 had asked Shenhua group to develop block one of Thar coal-field after accepting its proposal to establish a 600MW power plant. The group in collaboration with the Geological Survey of Pakistan (GSP) carried out studies and completed a feasibility report for the project. On the basis of the studies the group signed about seven agreements with the government for the construction of power plant, the sources said.

The proposed project was to be undertaken on build, operate and transfer (BOT) basis was scheduled to generate electricity by the year 2009. Total coal reserves in Sindh province are estimated at 184 billion tonnes. While only in Thar 175 billion tonnes of coal reserves are identified.

The Thar coal-field extends over an area of 9,000 sqkm out of which 356 sqkm has been studied in detail by the GSP, proving nine billion tonnes coal in four blocks. The moisture found in the coal at the Thar coal-field is 46.77 percent and heating value 5.774 percent (Btu) but when dried, its heating value jumps to 10.8 percent (Btu) making it the best coal in the world.